UnitedHealth To Expand On Obamacare Exchanges In 2015 'And Beyond'

Bruce Japsen
, ContributorI write about healthcare business and policyOpinions expressed by Forbes Contributors are their own.

UnitedHealth Group said this morning it would expand private health plan products on government exchanges under the Affordable Care Act “to as many as two dozen” states for next year, chief executive officer Stephen J. Hemsley said this morning.

The nation’s largest health insurance company, which raised its revenue forecast for this year by more than $1 billion to $130 billion thanks in part to strong growth in the “public and senior sector” said it will broaden its participation in public exchanges.

Hemsley made his comments during a 70-minute call discussing the company’s second-quarter earnings report that unveiled a 2 percent decline in net earnings on increased taxes and other expenses in part related to the health law.

But United’s underlying growth was solid, particularly on the revenue front. Revenues rose 7 percent to $32.6 billion on across-the-board gains in newly insured customers under the health law via exchanges, expanded Medicaid health programs for the poor and its Medicare Advantage business, which provides health benefits to seniors in contracts with the federal government.

Looking ahead, UnitedHealth said it will expand aggressively its private health plan offerings on government-run marketplaces known as exchanges after closely examining the first year of the law and pricing of rivals. UnitedHealth rivals like
Humana (HUM),
Aetna (AET), Wellpoint (WLP) and Blue Cross and Blue Shield plans are participating with more private health plan products at this point.

Hemsley described UnitedHealth’s expansion on the public exchanges in 2015 “and beyond” as “advancing our participation in a measured manner.” He said they would be offering some different products in the new exchange markets with varied pricing that includes HMOs.

UnitedHealth continues to improve its government business lines. For example, UnitedHealth grew its Medicaid insurance enrollment for the poor by 19 percent, or 730,000 people "in the past year," the company said in a statement. That included 380,000 in the second quarter and “635,000 year-to-date,” the company said in a statement.

Much of UnitedHealth’s Medicaid growth came in markets where states agreed to go along with the expansion of Medicaid benefits under the health law.

UnitedHealth executives said they expect Medicaid growth to be more than 800,000 before the year's end.

In the second quarter, UnitedHealth said it earned $1.41 billion, or $1.42 per share, in the three months that ended June 30. That compares to $1.44 billion, or $1.40 per share in the second quarter of 2013.

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